Growing Hawaii’s Grass-Fed Beef Industry

A movement to produce more homegrown grass-fed beef is gaining momentum through expanding partnerships with Hawaii ranchers and processors. This week’s statewide Agriculture Conference 2012 at the Hawaii Convention Center allows us an opportunity to announce another important step forward.

Ulupono Initiative is honored to be a part of the collaboration between a leading rancher and leading processor on the Big Island, which we hope will form the underlying foundation for an increasingly vibrant local ranching industry.

Working with partners with decades of experience will help reverse a steady decline in Hawaii’s beef cattle inventory that began in the 1970s. Parker Ranch and other ranchers and partners are researching grass pasture productivity. Our partners are examining irrigated and non-irrigated pasturelands to see how to profitably keep cattle raised in Hawaii eaten in Hawaii.

This week, Hawaii Beef Producers LLC is announcing it has joined Parker Ranch and Ulupono Initiative in an agreement to jointly fund pre-commercial trials for irrigated, fertilized pasture beef production on the Big Island of Hawaii.

The pre-commercial trials will run on 70 acres of pasture next to the Hawaii Beef Producers facility on the Hamakua Coast and involve just under 100 head of cattle. The trials will be completed by May 2013.

This latest development focuses on finding the most cost-effective, commercially viable method for increasing overall local grass-fed beef production, with the support of David De Luz Jr. and the Hawaii Beef Producers’ team.

The irrigated trial on Hawaii Beef Producers’ land, combined with the non-irrigated trial on Parker land can provide essential production cost information to help ranchers statewide determine the potential for developing commercially based intensive grazing systems that meet consumer demands for high-quality, affordable local beef.

In these pre-commercial trials, Hawaii Beef Producers is testing the impact of fertilized, irrigated grass using the Hamakua Ditch Irrigation System, and Parker Ranch is studying the impact of using fertilized, non-irrigated grass.

Kamehameha Schools is doing its own trial on unfertilized, irrigated pastureland and alternative feed crops in Hamakua. The outcomes from all of the trials will be combined and shared with all partners as well as the Hawaii Cattlemen’s Association and the University of Hawaii’s College of Tropical Agriculture and Human Resources (CTAHR) to help determine which combination of methods are best for lowering the production costs and improving the quality of locally produced grass-fed beef.

Innovative improvements can help to reverse the decline in ranching, which by 1986 saw Hawaii’s share of the local market dip to less than 30 percent. Ranch numbers were decreasing during that time along with the number of processing facilities.

After the closing of a large feedlot and slaughter plant on Oahu in 1991, weaned calves began to be shipped to the U.S. mainland and Canada to reach their sales weight as a way to cut costs. By 2003, the industry reported that approximately three-quarters of cattle marketed in Hawaii were exported, according to the Hawaii Agricultural Statistics Service. However, this business model exposed Hawaii’s ranchers to volatile corn prices, which in recent years, made this approach less and less profitable. Therefore, there is widespread industry interest in grass-fed beef for local consumption as a path to more reliable profits.

Since both the Kamehameha School and Hawaii Beef Producers-Parker Ranch irrigated trials use the Hamakua Ditch system, these trials are expected to shed light on what water rates are commercially viable for finish pasture operations, which could help the state set policies to expand local beef production statewide. Finishing operations in the Hamakua Ditch system region can greatly enhance the local beef supply to the Hawaii Beef Producers processing plant, which the state has invested in upgrading.

Ranchers of all scale can benefit from these trials, because they could replicate these approaches. In addition, a grass-based feedlot could be opened to fatten cattle from any rancher who wanted to dedicate animals to local food, without exposing them to the profit risk that comes with the price volatility of corn-based feeds.

Ulupono is pleased to take part in this effort that broadens collaboration with the ranchers and processors. We also believe it will help provide data on affordable water pricing, a key constraint to growing our local agriculture industry.

Despite the fact that agriculture has struggled to survive and thrive in Hawaii, it is testimony to the strength of our culture that we find ranchers, farmers, processors and educators all working together to form partnerships that will provide a more self-reliant and sustainable future for our community.

About the author:Kyle Datta is a founding partner of Ulupono Initiative, which in 2009 began investing in three key areas to make Hawaii more sustainable: more locally produced food, more renewable energy, and waste reduction. (It was founded by Pierre and Pam Omidyar. Pierre Omidyar is CEO and publisher of Civil Beat.) After more than 25 years in the energy and private equity realm, Datta makes his home on the Big Island where he works with ranchers and farmers to re-build a homegrown cattle and dairy industry.

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